Tournaments

RULE NO: RULE TITLE
61DER06-1: Tournaments
SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE: There exists an immediate danger to the public health, safety, and welfare due to the conduct of statutorily unauthorized poker tournaments that requires continued repeal of Rule 61D-11.027, Florida Administrative Code. The provisions of Rule 61D-11.027, Florida Administrative Code, that remained following a recent ruling of the First District Court of Appeal were in conflict with the bet and raise limitations found in Section 849.086(8)(b), Florida Statutes. As a result, the remaining rules are misleading in that persons regulated by those rules to believe that “no limit” game play was authorized. The term “no limit” in poker tournaments means there is no limit on the amount that can be wagered. As a result, Emergency Rule 61DER05-1, was enacted and the permanent rule repeal promulgation process was initiated. However, the permanent rule will not be effective by February 7, 2006 due to a pending rule challenge. Therefore, Emergency Rule 61DER05-1, will expire creating an immediate danger to the public health, safety, and welfare.
The existence of Rule 61D-11.027, Florida Administrative Code, which sets forth rules for tournament play, in and of itself suggests that tournaments may be conducted in a manner different from other authorized games. Further, specific rules such as paragraphs 61D-11.027(1)(c) and (3)(a) and (b), Florida Administrative Code, standing alone would authorize “no limit” play by allowing a participant to bet all of his or her chips after fifteen games or an hour of play and by allowing tournaments to be played with chips or tokens with “no cash value” in clear contravention of Section 849.086(8)(b), Florida Statutes.
Immediate repeal of the Division’s remaining tournament rules is needed due to “Structured/No Limit” poker tournaments (Exhibit 1) that, prior to Emergency Rule 61DER05-1, were being conducted at pari-mutuel facilities in violation of Section 849.086(8)(b), Florida Statutes. Section 849.086(3), Florida Statutes, expressly requires cardrooms to be conducted in strict compliance with the statute. Further, Section 849.086(15)(a)2., Florida Statutes, makes a violation of Section 849.086, Florida Statutes, by a licensee or permitholder a crime. The Department is also currently engaged in at least three legal proceedings relating to the operation of “all-in” poker tournaments (See, Washington County Kennel Club, Inc., Hartman-Tyner, Inc., Southwest Florida Enterprises, Inc., and St. Petersburg Kennel Club, Inc. vs. DBPR, DPMW, DOAH Case No. 06-0164RP; Hartman-Tyner, Inc., St. Petersburg Kennel Club, Inc., West Flagler Associates, Ltd., Southwest Florida Enterprises, Inc., Washington County Kennel Club, Inc., and Daytona Beach Kennel Club, Inc. vs. DBPR, DPMW, DCA Case No. 1D05-5430; and Bayard Raceways, Inc., a Florida Corporation vs. DBPR, DPMW, Case No. 2006-CA-249). As such, uniformity of law is extraordinarily important so as to be able to regulate the industry consistently without confusion. Therefore, the public health, safety, and welfare are clearly impacted by this form of legalized gambling.
The First District Court of Appeal recently affirmed a Final Order of the Division of Administrative Hearings that invalidated paragraphs 61D-11.027(1)(a),(b) and (e), (2)(a) and (b), Florida Administrative Code, which are part of the Division’s tournament rule section. Under the ruling of the Division of Administrative Hearings, tournaments are authorized because Section 849.086(2)(a), Florida Statutes, defines “authorized game” as a “game or series of games of poker.” As a form of poker directly authorized by the statute, tournaments must be played to comply with the wagering limitations found in Section 849.086(8)(b), Florida Statutes, which limits wagers in any game or series of games to a “maximum bet” that “may not exceed two dollars in value,” with no more than “three raises in any round of betting.” While the Division of Administrative Hearings ruled that cardrooms may set their own entry fees for tournaments, allow re-buys in tournaments and hold single table tournaments, any form of tournament poker that allows the value of any single wager to exceed two dollars conflicts with the wagering limitations found in Section 849.086(8)(b), Florida Statutes, which the Final Order found to be a “restrictive form of wagering.”
REASON FOR CONCLUDING THAT THE PROCEDURE IS FAIR UNDER THE CIRCUMSTANCES: A rule repealing Rule 61D-11.027, Florida Administrative Code, has been filed but will not be in place by February 7, 2006 due to a challenge filed against the rule. Therefore, this Emergency Rule is necessary to prevent persons regulated by those rules from conducting “no limit” game play.
Legalized gambling, such as cardrooms authorized by Section 849.086, Florida Statutes, is an area of law that Florida courts have routinely held is subject to very strict regulation. See PPI, Inc., 698 So. 2d 306. In fact, the Florida Supreme Court, in Hialeah Race Course, Inc. vs. Gulfstream Park Racing Association, 37 So. 2d 692 (Fla. 1948), stated that, “[a]uthorized gambling is a matter over which the state may exercise greater control and exercise its police power in a more arbitrary manner because of the noxious qualities of the enterprise as distinguished from those enterprises not affected with a public interest and those enterprises over which the exercise of police power is not so essential for the public welfare.” This very principle was echoed in Rodriguez vs. Jones, 64 So. 2d 278 (Fla. 1953).
Similarly, in Jordan Chapel Freewill Baptist Church vs. Dade County, 334 So. 2d 661 (Fla. 3d DCA 1976), the Third District Court held that legalized gambling falls into the same category as the regulation of drugs and liquor and, therefore, should be afforded the same strict regulation. In particular, the Third District held that “‘[g]ambling (or authorized gambling in the case of bingo) is an exceptional situation which has always been closely controlled in Florida for the protection of the public. Rodriguez vs. Jones, 64 So. 2d 278 (Fla. 1953)” Id. at 666.
Given the facts presented, this Emergency Rule is fair under the circumstances. There is an immediate and continuing need to make clear that tournaments must comply with the wagering limits of Section 849.086(8)(b), Florida Statutes. The remaining provisions of Rule 61D-11.027, Florida Administrative Code, are in clear conflict with the rationale contained in the Final Order, and therefore the repeal of those provisions must be continued.
Furthermore, Emergency Rule 61DER05-1, was challenged in Hartman-Tyner, Inc., St. Petersburg Kennel Club, Inc., West Flagler Associates, Ltd., Southwest Florida Enterprises, Inc., Washington County Kennel Club, Inc., and Daytona Beach Kennel Club, Inc. vs. DBPR, DPMW, DCA Case No. 1D05-5430, and an immediate stay of the Emergency Rule was requested. Although the challenge is still pending, the First District Court of Appeal denied the request for an immediate stay.
SUMMARY OF THE RULE: This emergency rule shall supersede the previously promulgated Emergency Rule 61DER05-1. The emergency rule repeals Rule 61D-11.027, Florida Administrative Code, which provides rules for the conduct of poker tournaments.
THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS: Joseph M. Helton, Jr., Chief Attorney, Department of Business and Professional Regulation, 1940 North Monroe Street, Tallahassee, Florida 32399-2202
THE FULL TEXT OF THE EMERGENCY RULE IS:

61DER06-1 (61D-11.027) Tournaments.

(1) A series of games of poker may include tournament play. Tournaments may only be conducted at licensed pari-mutuel facilities and must comply with the following criteria:

(a) Cardroom operators must use for tournament play a game authorized for general cardroom play under Rule 61D-11.002, F.A.C. Any authorized game used for tournament play must be listed on the cardroom operator’s approved license application, or on any subsequent applications/amendments that may be submitted for approval;

(b) No less than 9 players must be registered as participants at the start of play;

(c) Either a minimum of 15 hands per table per tournament, or a minimum of one hour’s duration per tournament, must be played. After the minimum requirements have been satisfied, wagering shall conform to the established rules and guidelines of the cardroom operator;

(d) Tournaments must commence and conclude on the same calendar day; and

(e) Only one entry per player per tournament.

(2)(a) The tournament entry fee per participant shall be based upon a maximum of $2 per bet and three raises per betting round. The entry fee shall not exceed the maximum potential value wagered by a single player in an individual game that is being used for tournament play.

(b) The cardroom operator is prohibited from allowing a participant to pay any fee to re-enter the same tournament. A participant’s elimination from a tournament is final.

(c) There shall be a designated winner for each individual hand of tournament play. The play of progressive games is prohibited.

(3) Tournaments shall be played only with tournament chips that are visually distinct from those used in normal cardroom operations, and shall be provided to the participants in exchange for an entry fee.

(a) All players shall receive an equal number of tournament chips for their entry fee.

(b) Tournament chips shall have no cash value and shall represent tournament points only.

(c) Tournament chips shall not be redeemed for cash or for any other thing of value except that the point total represented by the players’ accumulations of tournament chips shall be used to determine the tournament winners and/or final place in the tournament.

(4) Prizes may not exceed the aggregate entry fees paid by the participants.

(5) No table rake shall be made during tournament play.

(6) Gross receipts for a tournament shall mean the total amount received by the cardroom operator from all entry fees.

(7) Cash received for tournament entry fees must be kept separate and apart from all other cash received by the cardroom operator or management company until such time as it is counted. The cardroom operator shall report tournament activity on BPR Form 16-008. This form shall be filed with the division by the fifth day of each calendar month for the preceding calendar month’s activity. BPR Form 16-008 is adopted and incorporated by Rule 61D-12.001, F.A.C.

(8)(a) The cardroom operator shall provide the tournament rules to the division, and shall furnish copies upon request to interested participants.

(b) The published tournament rules shall include, but are not limited to, information regarding the amount of the prizes using a stated percentage of gross receipts, whether the tournament’s duration of play is based upon a fixed number of games or a stated time period, the use of blinds, and the wagering rules as authorized in paragraph (1)(c) above.

Specific Authority 550.0251(12), 849.086(4) FS. Law Implemented 849.086 FS. History–New 5-9-04, Repealed 2-7-06.

THIS RULE TAKES EFFECT UPON BEING FILED WITH THE DEPARTMENT OF STATE UNLESS A LATER TIME AND DATE IS SPECIFIED IN THE RULE.

EFFECTIVE DATE: February 7, 2006